Salesforce on Tuesday announced it was acquiring Slack, the popular work messaging platform, in a deal worth $27.7 billion.
The deal includes both cash and stock, with Salesforce buying Slack for $26.79 per share and 0.776 shares of its own stock. Slack’s share price has darted higher since last week, when the Wall Street Journal reported a deal was nearing the goal line, moving from about $25 per share to north of $43 per share when markets closed on Tuesday. Salesforce’s stock was down 1.8% on Tuesday, followed by another 4% drop in after-hours trading — coinciding with the software giant announcing its Q3 earnings and its deal to purchase Slack.
As CNBC noted, the move is one of the biggest in the software industry’s history. IBM’s $34 billion acquisition of Red Hat in 2018 takes the top spot; Salesforce’s deal is narrowly ahead of Microsoft’s $27 billion acquisition of LinkedIn in 2016 and the London Stock Exchange’s deal to buy Refinitiv last year, also for $27 million.
Wedbush analyst Dan Ives told CNBC last week the deal would be a “game-changer” for Salesforce and CEO Marc Benioff because it would “further build out its collaboration engine and product footprint as cloud spending ramps up across the enterprise.”
Salesforce was founded 21 years ago and has established itself as a powerhouse in the business world via its cloud-based work software. The company has been spending big bucks in recent years, including acquiring data-analytics company Tableau Software for $15 billion last year. Its potential Slack acquisition would be the most expensive in the company’s history, based on Slack’s market cap.